Mandatory disclosure for tenants

A new report produced by Energy Action and EnergyConsult for the City of Sydney has highlighted the benefits of expanding the Commercial Building Disclosure (CBD) program to include tenancies.

The CBD program is a national initiative that requires energy efficiency information to be provided when commercial office spaces of 1,000m² or more are sold or leased. This involves obtaining a Building Energy Efficiency Certificate (BEEC), which includes a NABERS star rating of the base building.

Since it was established in 2010, the program has measurably improved the performance of office base buildings; however there has not been a corresponding improvement in the efficiency of tenancies.

“An efficient base building does not somehow create efficient tenancies,” says Dr Paul Bannister, F.AIRAH, who co-authored the report. “The CBD program includes a tenancy lighting assessment, which assesses the efficiency of the tenant lighting system and its controls. But while these factors have an influence on tenancy energy use, they are only part of a picture that is often dominated by behaviour at the individual and institutional levels in relation to lighting use, IT equipment and supplementary air conditioning. To make significant inroads into tenancy energy use, it is necessary to tackle these tenant-specific factors.”

Bannister believes the mandating of a NABERS tenancy rating would bring out the performance impacts of these generally non-technical factors, and thereby change behaviours over time. Simple examples might be switching off tenant IT equipment overnight, and improved control of supplementary HVAC, both in terms of avoiding over-specification and limiting operation to times when it is necessary.

“The issue of supplementary HVAC also raises the question of whether the move to more efficient base buildings has somehow created an environment of under-conditioning that has prompted increased specification and use of tenant-installed supplementary systems,” Bannister says. “Some in the industry argue that this has resulted in apparently good base building ratings being achieved at the expense of increased tenancy energy use, as the supplementary systems are counted within the tenancy, not the base building rating.

“There is a counter argument that tenants are seeking higher occupant densities than buildings have been historically designed for, leading to increased supplementary HVAC requirements. Indeed, the general level of customisation of HVAC to suit individual tenancies seems to be rising, particularly in the top end of town. While NABERS rules provide some protections against intentional abuse, mandatory disclosure of tenancy ratings would certainly up the ante around supplementary HVAC for all parties, and thereby provide better balance in supplementary HVAC decisions.”

The report demonstrates that Australian office-based businesses could enjoy substantial energy savings and cost benefits if the CBD program were extended. It recommends that all building occupants over 500m² be subject to an annual NABERS Co-Assess (Energy for tenancy) rating, which would replace the current BEEC.

According to the report, the expanded approach to reporting would deliver cumulative energy savings of 7,911TJ by 2030, and emissions reductions of 1,668,000t CO₂e.

The cost of disclosing to industry would be $26m, spread over a decade. This is expected to unlock more than $142m of additional investment to tenancy energy efficiency, which would result in more than $356m in energy bills savings.